The impact of the pandemic and recent interruptions to global shipping have made evident the risks associated with far-flung supply chains for the goods and services we depend on for our economic and national security. The electronics that power our modern world are of particular concern. One response to our dependency on foreign suppliers was the CHIPS Act. Funding is beginning to flow to companies in the semiconductor industry, but the CHIPS Act only begins to address a far too fragile domestic electronics industry.
The state of the defense electronics-industrial base is a particular concern. Additional funding mechanisms exist, and now is the time for Congress to fully fund them. One of those tools is the Defense Production Act account used by the Pentagon to invest in domestic capacity for critical defense technologies. Among the most critical is America’s ability to produce electronics. Modern weapons systems — everything from Javelin missiles to F-35 jets — contain a technology stack consisting of semiconductors, integrated circuit substrates and printed circuit boards.
American companies have proudly and consistently delivered the components our men and women in uniform need to be successful. However, the U.S. share of the printed circuit boards market has dropped since 2000. The U.S. today accounts for 12% of global semiconductor production, but only 4% of the printed circuit board and nearly none of the integrated circuit substrate fabrication.
At the same time that our ability to manufacture electronics was offshored, the armed forces became more technologically sophisticated — and the demand for electronics, including microelectronics, increased. We became reliant on nations on the other side of the world for the supply of some components. This is an unacceptable trend that puts our national security at risk.
Just as the government is underwriting the future of the semiconductor industry in places like Arizona and Ohio through the CHIPS Act, so too must the government commit to making the next generation of printed circuit boards and integrated circuit substrates in the United States. The Defense Department’s Defense Production Act account was created for just this purpose.
Now is the time for Congress to adequately fund this important tool. Last month, 54 electronics executives called on Congress to fully fund the Defense Production Act Purchases account at the House-passed level of about $618 million and $1.08 billion for the Industrial Base Analysis and Sustainment Program. The letter urged this action to address a disconnect between stated national security objectives and funding for the Defense Production Act Purchases account.
The urgency to act today to prevent an emergency tomorrow was underscored in the recent National Defense Industrial Strategy. This first-of-its-kind report named as a top priority the need to “achieve resilient supply chains,” which includes the need to “continue and expand support for domestic production.” The strategy also identified microelectronics as a critical technology needed to outpace the many threats facing our country and our allies around the world.
A renewed focus on global competition, combined with shortages of goods and transportation interruptions, has focused Washington on the synergy between national security and industrial policy. We cannot afford to wait any longer to address our dependency on foreign nations at the end of long and vulnerable supply chains.
As Congress finalizes appropriations for fiscal 2024, we urge it to adopt the House-passed funding level of about $618 million for the Defense Production Act and $1.08 billion for the Industrial Base Analysis and Sustainment Program. Providing such funding levels will be a step in the right direction to strengthen U.S. printed circuit board fabrication and revitalize the greater defense electronics-industrial base at a time of greater geopolitical risk.
John W. Mitchell is the president and CEO of the IPC trade association. Travis Kelly is the chairman of the Printed Circuit Board Association of America. Nathan Edwards is the executive director of the U.S. Partnership for Assured Electronics.
